Industry Compensation under Relocation Risk: A Firm-Level Analysis of the EU Emissions Trading Scheme

When regulated firms are offered compensation to prevent them from relocating, efficiency requires that payments be distributed across firms so as to equalize marginal relocation probabilities, weighted by the damage caused by relocation. We formalize this fundamental economic logic and apply it to...

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Bibliographic Details
Published in:	The American economic review Vol. 104; no. 8; pp. 2482 - 2508
Main Authors:	Martin, Ralf, Muûls, Mirabelle, de Preux, Laure B., Wagner, Ulrich J.
Format:	Journal Article
Language:	English
Published:	Nashville American Economic Association 01.08.2014 American Economic Assoc
Subjects:	Benchmarking Carbon Carbon dioxide emissions Carbon pricing Carbon trading Climate change Climate change policy Climate policy College campuses Compensation Compliance Costs Economic theory Emissions trading Employment Energy economics Environmental policy Free trade Incentives Industrial efficiency Industrial plant emissions Industrial regulation Investment analysis Location of industry Payments Permits Personal finance Pollutant emissions Pollution control Probability theory Regulated industries Regulation Relocation Risk Risk management Rules Studies Unemployment Western Europe Europe
ISSN:	0002-8282, 1944-7981
Online Access:	Get full text
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